MJ Hudson Group plc

(the "Company", "Group" or "MJ Hudson")

Sale of UK Fund Management Business

MJ Hudson Group plc (AIM:MJH), the specialist service provider to the asset management industry, announces that, on 9 March 2023, Tower Gate Capital Limited, an indirect wholly owned subsidiary of the Company, entered into a conditional agreement with Khepri Limited (the "Purchaser") to sell to it the Group's UK Fund Management business ("FMS Business").

The companies that are being sold under the FMS Sale are:

1.            MJ Hudson Advisers Limited

2.            MJ Hudson Fund Management Limited

3.            MJ Hudson Consulting Limited

4.            MJ Hudson Fund Administration Limited

(the "FMS Companies")

The Purchaser is a special purpose acquisition vehicle set up to acquire the FMS Companies and certain client contracts being serviced by the FMS Companies. It is currently wholly owned by William Roxburgh and Michael Booth, both directors of the FMS Companies (the "FMS Directors") but will be funded by investment by way of convertible loan notes and equity investment from David Sherriffs.  It is expected that, on a fully converted basis, this will convert such that the FMS Directors would hold 10% following such conversion. 

The consideration for the transaction is £1.0 million in cash plus £15,000 for the first three months from exchange and £30,000 thereafter until completion, to be paid on completion.

Following exchange, the Purchaser will also provide £1.8 million of working capital to the FMS Companies of which £1.3 million is expected to be used as regulatory capital following completion.   On completion, the inter company loans between the Group and the FMS Companies will be reorganised as a consequence of which the outstanding loans due from the Group to the FMS Companies, which are £1.98 million, will be extinguished

Completion will take place once regulatory approval from the Financial Conduct Authority is received.

The profits before tax attributable to the assets being sold for the audited year to June 2021 was £600,000 and profits before tax for the unaudited year end June 2022 were £22,000. The value of the FMS Business on the Group's balance sheet is £1.07 million.  Any monies received will be used to provide working capital to the Group and/or repay the Group's debts.

As FMS Directors are directors of the FMS Companies and sole shareholders of the Purchaser, the acquisition represents a related party transaction.  The directors of the Company consider, having consulted with the Company's Nominated Adviser, Cenkos Securities, that the terms of the acquisition are fair and reasonable insofar as its shareholders are concerned.

For further information, please contact:

MJ Hudson Group plc

Geoff Miller, Executive Chairman

Cenkos Securities plc (Nomad and Broker)

Giles Balleny

Stephen Keys

Callum Davidson

+44 20 7397 8900

Buchanan (PR Adviser)

Chris Lane

Jack Devoy

George Cleary

+44 20 7466 5000

mjhudson@buchanan.uk.com